Cindy Luppi: State should lead on carbon pricing

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BOSTON >> It is clear that climate change is one of the most urgent issues of our time and we have an obligation to address it today. If we do not, the consequences for communities across New England could be dire, as we face ever more severe weather and harm to public health.

Fortunately, Massachusetts has the opportunity to further our status as a national leader on climate change, just as we led the country on universal health care and marriage equality.

We can become the first state to adopt a carbon fee and refund policy, a market-driven system that encourages a shift toward cleaner energy while minimizing economic impacts, especially on rural communities and low income households.

Greenhouse gases, particularly carbon dioxide, are the main cause of climate change. In Massachusetts, nearly all of our carbon pollution comes from the burning of fossil fuels such as natural gas, gasoline, oil and coal.

Fees and rebates

Two Statehouse proposals would impose fees on companies importing fossil fuels into Massachusetts, creating an incentive for both fossil fuel suppliers and consumers to use cleaner energy and become more energy efficient. Legislation introduced by Sen. Mike Barrett and 41 co-sponsors would establish a dedicated fund, and then charge fees to importers based on the carbon content of the fuels they bring into the state.

To keep the costs of living and doing business as low as possible, the fees would go into the fund and be passed on directly to individuals and employers. Each state resident would receive an equal benefit, regardless of how much fossil fuel they consume, except that rural households would get an extra rebate to compensate for their higher driving mileage. Since they use less energy than higher-income residents, on average low- and moderate-income households would come out ahead.

At the same time, businesses would receive a dividend based on their share of the state's employment. Protections would be given to employers that could be disproportionately affected. Because the size of the benefit would not be linked to the fees paid, all households and businesses could save money by using less fossil fuel, encouraging energy efficient practices. A proposal by Sen. Marc Pacheco follows a similar model, but would invest some of the funds in the commonwealth's growing clean energy sector.

We already know that this kind of carbon pricing can cut the pollution harming our health and planet. As part of a 2014 study commissioned by the Massachusetts Department of Energy Resources (DOER), the nonpartisan consulting firm Regional Economic Models Inc. found that by 2035 this policy could substantially reduce our greenhouse gas emissions to 20 percent below the 1990 level, a substantial improvement from the current 11 percent.

Furthermore, in addition to encouraging consumers to use more renewable sources, a carbon fee will fuel investment in the clean energy sector, creating jobs in Berkshire County and throughout Massachusetts. The DOER study estimated this model could produce thousands of additional jobs.

The new normal

Carbon pricing is already working. British Columbia in Canada has experienced a remarkable transformation since it passed such pricing in 2008. Fuel consumption there is down by 16 percent, and the clean energy industry is booming. Moreover, since 2008, British Columbia's economy has outperformed the rest of Canada. In fact, carbon pricing has become the new normal around the world. By next year, more than half of the world's output will be produced in places that price carbon.

Massachusetts passed the Global Warming Solutions Act (GWSA) of 2008 to provide leadership in addressing the growing threat of climate change. The law mandates the commonwealth to reduce its greenhouse gas emissions to 25 percent below the 1990 level by 2020, and to 80 percent below the 1990 level by 2050. We have made progress, but without additional action, we will not meet those requirements. Implementing a carbon fee and rebate model is the single most effective policy the commonwealth can enact to achieve the GWSA's mandates.

We know that Massachusetts can lead the rest of the nation, just as we have on issues like health care reform and marriage equality. And we know we must act. Let's be smart now and take this opportunity to address one of the greatest threats of our time. Let's pass common sense carbon pricing.

Cindy Luppi is the New England director of Clean Water Action and chairwoman of the Massachusetts Campaign for a Clean Energy Future.


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